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tax credit system. Mr. Kroll advised that his reason for changing recommendations <br />to this investor structure was that the initial investor could not get an IRS letter of <br />ruling for that previous option and required purchase of the array by the city, <br />thereby making him uncomfortable continuing with that recommendation for the <br />city. Since that would have prevented an investor from participating in the <br />charitable donation requirement, the option to purchase was removed; while in this <br />scenario if the city remains satisfied with the PPA arrangements, it didn't have to <br />buy the system or could choose to do so at any time. Under the original scenario, <br />Mr. Kroll noted that tax credits would expire before a charitable donor was found, <br />causing the entire deal to evaporate and numbers revert to a typical finance <br />situation. <br />Mr. Kroll expressed his personal disappointment that the first creative investment <br />model he presented could not work; but stated his preference that he could fully vet <br />an investor, and until he received that Letter of Intent and was able to fully review <br />the initial investor's numbers, he had not been able to determine that they were not <br />lining up as well as initially projected and leaving considerable obscurity. <br />Therefore, Mr. Kroll advised that he wasn't comfortable presenting it to the city, <br />and this latest scenario was the best traditional financing option he could find, and <br />would still provide the city with 18-20% power savings from what they're currently <br />paying to Xcel Energy now versus leveraging their cash flow. Mr. Kroll noted that <br />this investor had a national presence with a solid history and long-term foundation <br />of investment assets. <br />Contingent upon the City Attorney's review of the contract, Member Cihacek stated <br />his support for the financial basis and positive cash flow in year -one as presented; <br />and also stated he was more comfortable with the risk in this relationship, as well <br />as a longer lifespan and stronger representation of the purchase price to overall <br />savings. Member Cihacek suggested the city retain the PPA agreement until its end <br />and then get rid of the system. <br />Motion <br />Member Cihacek moved, Member Wozniak seconded, directing staff and legal <br />counsel to proceed with negotiations with Sundial Solar for a Power Purchase <br />Agreement (as drafted in Attachment A) with Sundial Solar, with the Tmal <br />terms and conditions of that contract brought back to the PWETC for their <br />review and Tmal recommendation to the City Council. <br />Discussion ensued on next steps intended in the motion, including legal review by <br />the City Attorney, engineering to establish final numbers, and more discussion with <br />Xcel Energy to gain atrue understanding of the current rate structure for the OVAL. <br />Mr. Kroll noted that he had spoken to the City's Environmental Engineer Ryan <br />Johnson about the current rate schedule the city has with Xcel for the OVAL and <br />them not currently being met. Mr. Kroll advised that if the city did not meet those <br />rate considerations in the next 6-9 month period at demand load limits, the discount <br />Page 9 of 18 <br />